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Check Hold Seems Excessive

I deposited an out-of-state check for $11,000 on October 13. I completely understand putting a hold on the funds until it clears. I was given access to $5,000 on October 20, but the remaining $6,000 won't be available until Ocotber 27. I am able to verify through account statements that the check has cleared as of October 18, and am more than willing to have my depository bank call the issuing bank to verify that it's cleared. I understand that the depository bank is not violating Regulation CC, but I find it poor customer service for them to hold on to $5,000 for two extra days and to hold onto $6,000 for seven extra days. I am a business customer who cashflows between 10-15k per month and I have never had any bad transactions occur and have deposited numerous larger checks (one was for $33k, but granted, they were local). Regulation CC doesn't prohibit the depository bank from making funds available earlier than the maximum allowable hold, but my depository bank is claiming they are unable to remove the hold and must go through the stated hold period. Is there something I'm missing here in regards to when a deposit actually clears? Why on earth does the bank want eleven days when the check was approved within forty-eight hours and cleared within thirty-six hours? Eleven days seems quite excessive to me, and why give me access to part and not the whole...if a check is good and clears it clears completely?

It appears that the check was what bankers call a non-local check. Your bank held the first $5,000 of the check for five business days, and appears to have held the rest of the check amount for a total of ten business days. That's within the limitations on holds that are found in federal banking regulations (the final $6,000 could have been held until October 30). The outside hold time limits are in the regulation to help minimize the risk to banks when deposited checks are bounced. The same regulation also requires that the first $5,000 be available within five business days unless the bank of deposit has some specific reason to hold it along with the balance of the check. That's to give the depositor access to some of the deposited funds even if the bank of deposit holds the rest.

Your bank does not know when checks that it accepts for deposit are paid, unless they are drawn on the bank itself. It would have no reason to contact the other bank to find out if the check cleared, unless you asked them to do this.

Now that you know the check has been paid, you have rightly asked the bank to lift its hold. The suggestion that the bank is not allowed to do so, sounds like the answer came from a teller who doesn't understand the bank's systems. Put the question to someone at a higher level -- a branch or regional manager, for example.

For future deposits, clarify what the bank's intentions are before making your deposit. Your bank certainly is not required to place prolonged holds on your deposits. Perhaps a reasoned discussion with the bank's branch manager will provide the bank with the reassurance it apparently needs that your deposits are not something for concern.

Published on 10/23/06